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Closing Bell With Maria Bartiromo

News/Business. Maria Bartiromo. Analysis of the day's winners and losers in the stock market. New.

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01:00:00

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San Francisco, CA, USA

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Comcast Cable

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

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528

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480

TOPIC FREQUENCY

Us 18, Allstate 7, Washington 6, New York 6, Sandy 4, John Boehner 4, Miami 3, Egypt 3, U.s. 3, Obama 2, Geico 2, Unitedhealthcare 2, Blackrock 2, Carl 2, Rodger 2, Maria Bartiromo 2, Morsi 2, Hbo 2, Cialis 2, Keith Springer 2,
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  CNBC    Closing Bell With Maria Bartiromo    News/Business. Maria Bartiromo. Analysis of the  
   day's winners and losers in the stock market. New.  

    December 4, 2012
    4:00 - 5:00pm EST  

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dividends. that might be some movement on the up side. >> all right. very good. thank you, peter. always good to see you. going out with the bias to the downside now suddenly. we expected market going higher, and it was. now we're seeing some selling. the dow down 11 points on the close. stay tuned. more on the anticipation of the fiscal cliff, the ceo of a major insurance company on what the fiscal cliff means to his industry right now as the second hour of "the closing bell" gets under way with maria bartiromo. see you tomorrow. and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to "the closing bell." i'm maria bartiromo on the floor of the new york stock exchange. this market not able to get anything going today as the fiscal cliff fears continue to hang over us. as you see, we turned negative right at 4:00. in fact, we're looking at a decline of about 13 points right her here. the nasdaq composite also under pressure to the tune of five.
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the s&p 500 down about two points on the session. i want to take a closer look at what moved the markets as we await any decisions out of washington. joining us right now, keith springer, abbigail doolittle, and our own bob posani. keith, let me get your take on the cliff here and on what's to happen in terms of the markets. do you expect the economy to go over the fiscal cliff? what kind of reaction might we see in the market if that were to materialize? >> well, if we saw the market sell off in a big way, i don't think anybody believes we're going to go over the fiscal cliff. there will be some sort of resolution. they'll come up with some tax cuts, some breaks in spending, and probably kick the can down the road on a lot of it. i love the way this market is acting. it's not selling off with all the bad news, all the bickering, all the bad words on each side. you've got to love the way that this market is holding up here. doesn't mean investors need to be carefree, but overall, it
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looks like the market is setting up with a lot of negative sentiment out there. looks like there's a lot of opportunity for a big run higher once we get some form of resolution. i really believe we're going to get it. >> you think by year end? >> i really do. i think they want to go home for christmas. they're not going to want to not go home for christmas. you can always count on politicians to do the right thing when all other options have been exploited. they're going to finally get there because they have to. they're not going to solve 100% of it right away. >> jump in, abbigail. >> i think it's too early to be bearish or bullish, for that matter. i think that if we look back to last year, the debt ceiling crisis, technically the trading of last year was very similar to this year. wide sideways volatile range. if you recall, that was resolved at the last minute as the last guest was suggesting this crisis
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may be. yet, the markets broke to the downside. i think it's too early to say we're going to see a big break to the downside or up side. technically, i would say there are more indications that the break could be toward the downside when we look at vix, the nasdaq composite, transports. right now it's about uncertainty and not make too big bets on, you know -- >> you're not going to touch it. you don't want to make a prediction. dean, what do you think? >> i think it's relatively even odds whether we go through the end of the year without a resolution or not. i think we want to avoid falling into the trap of thinking that the politicians will get to an agreement just because they have to. they are quite far away right now, and there's a lot of things to resolve. we're not seeing movement. i don't think we necessarily can assume that everything is going to be fine at year end. >> all right. so how do you want to allocate capital? you've got to allocate capital and sort of make decisions about folks' money regardless. what are you doing? >> well, we think one would want
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to be cautious in the near term. we think ultimately we will get to a deal, whether that's this year or next year. then we think we want to be more risk-on. in the near term, i think one would want to be relatively cautious. >> bob, that's what we're seeing in these markets every day, isn't it? cautious. you look at one way in the morning and it's the other way at night. it certainly feels like this market is still expecting a deal, as we've heard on this panel. otherwise, this market would be plummeting. >> i think the markets missed a very key thing that happened today. john boehner, the speaker of the house, sent a message that a deal was in the works. he threw several house members off of key committees when they criticized him openly for looking like he was ready to make some deal on taxes with president obama. that's a sign to me that he's going to clear the decks to try to push through a deal. it's a sign that we're going get some kind of tax increases for the top 2%. i don't know where those numbers
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are going to be. pretty clear to me that a deal is in the works and we're heading in that direction. what i'm not sure of is whether the market will go up on this, necessarily. >> in terms of that january effect, bob, does that even matter this year? >> yes, look, it's not long from anybody, january and february are the best months of the year. that's a factor. >> let me ask you about putting money to work, keith springer. you say we're going to get a deal regardless. we may get a deal regardless, but that deal means probably higher taxes and lower spending. what are the areas in the economy in your view that get impacted most by a deal? >> well with, we're going to have less spending in the economy next year, which is going to slow down growth, which is where a bear market will come in, but not right away. there's so much negative sentiment in the economy and markets right now that there's a lot of room on the up side for the stock market. you have to be careful in dividend paying stocks. big believer in dividend paying
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stocks, but i have to be careful on the ones because if the dividend tax rate goes higher, you don't want to be stuck in them. there's a great opportunity right now for investors looking for dividends. of course, if a dividend increase for taxes comes in, you don't want to be stuck holding the bag. i see a big run up once a deal is made for a few months, but then investors have to be careful. sort of the invest for need, not for greed mantra where you want to not have all your chips on the table. just be investing for what you need. >> we'll leave it there. thanks, everybody. appreciate your time today. see you soon. we are, in fact, just 27 days away from that fiscal cliff. did anything happen today to bring us closer to a deal? let's get the facts. eamon javers on capitol hill now with the story. >> reporter: hi, the story up here on capitol hill, speaker of the house john boehner facing a bit of a brush fire on the right here. senator jim de mint calling the proposal an $800 billion tax hike earlier today.
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saying that's going to allow washington to continue to spend money here on capitol hill. that's been met with a little bit of interest here in the halls of congress because that's a sign that republican conservatives are not entirely thrilled with the speaker's proposal to the president of the united states. it brings up the question of how much the speaker can actually negotiate with the president and how much his hands are going to be tied by dealing with his own conservative caucus here on the hill. talking with those republican members today, it seems like the speaker still has the upper hand. that's going to narrow some of the running room that the speaker has going forward. very, very dicey situation for speaker boehner today. >> all right. we'll be watching that. thank you so much, eamon. want to get to mary thompson now. >> pandora reporting an adjusted loss for the quarter -- adjusted earnings, i should say. up five cents a share on revenue of $120 million. the company also gave guidance
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for the fourth quarter, seeing an adjusted loss for that period. up 6 to 9 cents a share, which would be below analysts estimates for that quarter. revenues also seen slightly below analysts' estimates. so the stock in the after hours session trading lower. back to you. >> it was a five cent share earnings in the third quarter, but they're predicting a loss for the fourth. >> yes. i'm sorry. let me repeat that. on an adjusted basis, again, the company earned five cents a share on revenue of $120 million. that was actually ahead of expectations. we have earnings stimts of about a penny a share for the company. again, its fourth quarter guidance is below estimates. that's putting pressure on the stock. >> and has it down 23%. thank you. egypt's president mohamed morsi fleeing the palace today. all of this as the backlash to the new sweeping power he is
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granted himself bubbles over. we'll take you live next to egypt for the latest developments on this important story. stay with us. also ahead, netflix stocks sky is rocketing today in the wake of its licensing deal with disney. how big of a deal is this for netflix, and is it a stock to own? stay with us on that. later on, bracing for a catastrophe. allstate estimating hurricane sandy will cost it over $1 billion, but will the impact on the fiscal cliff be even worse? the head of allstate is with me sitting down for a cnbc exclusive coming up in a few minutes. don't miss it. back in a moment. [ male announc] at scottrade, you won't just find us online, you'll also find us in person, with dedicated support teams at over 500 branches nationwide. so when you call or visit, you can ask for a name you know. because personal service starts with a real person. [ rodger ] at scottrade, seven dollar trades are just the start. our support teams are nearby, ready to help. it's no wonder so many investors are saying...
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welcome back. take a look at netflix. the stock catching fire today after getting a deal for exclusive streaming rights to disney movies. the deal does not kick in until after 2016, but investors are loving it today. how much of a game changer is it for netflix? porter, your take on this. is this justified, this move in the stock? >> reid hastings, netflix ceo, is pulling himself back from the brink with this move, maria. it's absolutely a show stopper.
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>> okay. so why is it so important for netflix? >> well, they've pretty much exhausted the growth potential in the u.s. their growth is coming from other countries. right now they're operating, believe it or not, in 51 countries outside the u.s. they have about 30 million paying subscribers. they don't have enough content. the content that they've just acquired the rights to through disney is a real show stopper. it puts them miles ahead of the competition. amazon, hbo go, hulu, which disney owns a part of. >> julia, what's your take on this? >> the interesting thing, maria -- >> maria -- >> wait a second, julia. i'm sorry. what were you saying, porter? >> the interesting thing about this transaction is no price or terms were mentioned.
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the deal could actually be pretty close to the market cap of netflix, which is $4.8 billion today. >> i see. julia, go ahead. >> maria, i think a key thing to point out here is that netflix is now getting movie content in the same window as premium cable chabls used to get it. we're talking about hbo, showtime, stars. those were the three channels that had exclusive access to premium movies seven to nine months after they were in theaters. now that's going to netflix. it shows netflix competing on the same level as an hbo. for disney, my sources tell me disney will be bringing in more revenue from this deal than it did with its deal with starz. as to how much that is, maybe somewhere in the range of $300 million a year. there is no official estimate there. >> j.r., what do you think? in terms of looking at this deal, are both parties winners here? >> well, i think it's good for
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netflix in that a lot of people are wondering about whether or not they could afford a deal like this. clearly, they can afford it. going to disney, getting that validation from disney, you can see investors are loving that. in that regard, it's very good for netflix. obviously for disney, they're going to make more money. >> in terms of netflix, you know, porter saying it's pulling itself back from the edge. they needed to do something, right? >> they sure did. if you look at -- what's great about netflix early on when it was dvds, you could get all these movies that had so much great content. now they're focusing on streaming. you don't have that same kind of content. this is addressing one of the big concerns with netflix. what can you even watch on that stream? what do you want to watch through streaming? now you have an answer. >> porter, is this a reason to buy netflix stock? >> i think it has to be a reason. the big buyer over the last three months has been carl icon, who called reed hastings saying i'm putting your company in play. he bought in somewhere at 50%
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less than the stock is today. he's looking like a real winner as well. the real question, maria, is can netflix pay this price? they have off balance sheet obligations next year for movies they've already licensed of close to $2 billion. they're not generating anything like that kind of capital. they need to continue to get a better market cap, and they still are probably as icon has suggested in play. >> all right. we'll leave it there. thanks, everybody. see you soon. we'll be watching netflix. about 40,000 protesters in egypt, reportedly forcing president mohamed morsi to flee the presidential palace today. jim joins us now on the telephone. >> well, those tense of thousands of anti-government protesters who did the marching on the presidential palace were initially met by riot police who blocked off all approaches to the symbolic seat of power, the
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palace. these protester were calling loudly for an end to president morsi's decrees. we know they've given him near absolute power. they also call for a cancelling of that snap referendum that he's called for to ratify a draft constitution, which many critics here are saying favors egypt's islamists. at one point, the police were seen firing tear gas into the crowd, but that backfired when some protesters broke through police lines. police then dropped back, regrouped, and order soon returned. eventually morsi's motorcade was seen leaving the palace. then the police slowly left the area as well, leaving it to a lot of baffled protesters, wondering what to do. many of them went home at that point. maria, the opposition calmed this protest a last warning. it may give them a shot in the arm. they did look good tonight and looked like they had strength.
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today, several newspapers and tv stations joined in a general temporary strike as well. this isn't over yet. back to you. >> thank you very much, jim. we'll be checking back with you on latest developments out of cairo. meanwhile, up next, natural disasters are one thing, but man made ones? allstate ceo sits down with me next for an interview you'll only see on this network. see what he thinks about the fiscal cliff. later on in the program, with the rush to sell high-end homes to take advantage of this year's lower tax rates, is it a good time now to snap them up? our wealth editor robert frank. plus, our real estate correspondent will tell you what you need to know back half of the show. don't miss it. and here's a lye shot of the street outside the new york stock exchange. christmas tree is right behind the band there. they are ready for the tree lighting ceremony. expect it to take place about an
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where can back. allstate is crediting its catastrophe exposure for limiting what it will pay out for hurricane sandy claims. those payouts will be just over $1 billion. the company is trying to limit the exposure and better manage its cash. the stock is up nearly 50% this year. stock has done quite well, as you can see, from that yearly
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chart. over the last month, despite hurricane sandy, it is still up 5%. but would going over the fiscal cliff hurt or derail the insurance giant as many expect it to derail business in general? joining me now is the chairman and ceo of allstate. thank you for joining us. president and congressional leaders are meeting with state governors today. you're one of the ceos who met at the white house with some of your other colleagues in business. what's your stance of where we are right now in terms of a deal? >> i'm concerned about it. the good news is everybody sees this as an opportunity to really show american global leadership. the rest of the world is all messed up on this. we can show them how to get it done. they've also all agreed on the three buckets, that being revenues, entitlements, and spending reductions. the bad news is they haven't agreed on how much into each bucket. and i don't think they're trying to create a win/win for each other. most good negotiations, you try to help the other person come out with a win.
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i don't see that here. >> you have to operate your business regardless of what's going on around you. what is your gut? do you need to prepare for the worst right here? >> we're in a slightly different position than some businesses in that everybody buys our product regardless of what happens to the economy. either they're required by state or their banks. we don't have to lay anybody off. people keep talking about when is the deadline. it was two months ago. people have done their plans, their budgets. we're now thinking about what happens late in 2013, what happens in 2014. so, you know, the clock is already past. it's time to get it done. >> that's what i said the other day. the talk about this is just an opening salvo. i think it's time for that to be over. you had 13 months to do it. >> my sense is they've done a lot of work. the problem is if you look at revenue, president obama wants about twice what the republicans are offering. if you look at spending, the republicans run about twice what obama is offering. they got to figure out how to
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come together on this. they're arguing over rates or deductions, which makes no sense. i mean, it's like you want to go on a trip. we decide we're going on a trip together. we're going to argue about whether we're taking a bus or a train. just figure out how much money you want from revenue, figure out who you're going to get it from, figure out how you're going to protect people, then figure out the formulas. >> and the white house wants the money to come from a specific place. he doesn't necessarily want $1.6 trillion clean. he wants it to come from higher tax rates. >> and i think it's fine say where you want to get the $1.6 trillion or $800 billion from. you ought to just call -- i want to get it from people who make more than $250,000 as opposed to trying to lock people into a formula. what you really need is money. >> you put it so simply, as if it's easy. i guess it is. i don't know why they're having such a difficult time with that. let me get your take on what senator jim demint said.
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he said house speaker john boehner's plan, which of course is raising $800 billion in proposed revenue by overhauling the tax code. it's not necessarily raising the rate. it's broadening the base, perhaps lowering some taxes and overhauling that tax code. he said that would destroy american jobs. as the chief executive of a major u.s. corporation, do you agree with that? >> i think it's hard to decide whether it's going to destroy a job until you know what the specifics are. i do think you need to provide incentives for people to keep growing their business, to make more money. i think a really high progressive tax rate won't do that. i do think -- if you raise the rates by a couple points, it's not going to drive everybody crazy. i think what we have to do is get the government out of this industrial policy where every time we turn around, they want something done. they pass a tax law. they get people to invest in it. then they turn around and blame you for taking advantage of the tax law. they call it incentives. then they call it loopholes.
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i think we have to get the government out of that part of the business. that tax code has to be changed. >> you've got to pay your fair share. >> everybody should pay their fair share. >> allstate is reducing its exposure to muni debt. why? is this a reaction to the fiscal cliff? >> well, we started reducing our municipal debt a couple years ago when the recession was on and state governments were having a hard time. we just had too much. we had about $26 billion. now we're down to 13. i feel good at where we're at. we reduced it for four reasons. if you're loaning somebody money, right, you want to make sure they got income to pay you. you want to make sure they got decent balance sheet. you got to like the management team. you got to like governance. in many of these states, we didn't like all four of them. we thought they didn't have any money, weren't generating enough tax rev news, their governance was terrible.
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so we said, you know, we're just going to get smaller. >> hurricane sandy, big hit? >> $1.75 billion. about a quarter worth of earnings for us. i toured the damage yesterday. all the devastation you'd expect. i saw all the places. the interesting thing was what you don't see in those tapes are the american resilience. people pick themselves up and get going again. then the community's spirit. i'm out with our agency owners. they're hugging their customers. you go by the vfw hall, they're passing out food and water. you have motorcycle clubs passing out water. that's the nice part. that's what makes america great. we could use a little of that in washington, we might get the fiscal cliff resolved. >> great point to make. tom, good to have you on the program. thanks so much. >> nice to be here. >> thomas wilson joins us, the chairman and ceo of allstate. up next, high-end dreams.
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we'll talk high-end real estate next. later, sticker shock at the hospital. we're going over the fiscal cliff. will that coupled with obamacare kicking in sent your hospital bills through the roof? i'll talk with the head of one of the biggest hospital groups in the city. stay with us. back if a moment. [ male announcer ] this december, remember -- ♪ you can stay in and like something... ♪ [ car alarm deactivates ] ♪ ...or you can get out there with your family and actually like something. ♪ the lexus december to remember sales event is on, offering some of our best values of the year. this is the pursuit of perfection. since ameriprise financial was founded back in 1894, they've been committed to putting clients first. helping generations through tough times.
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welcome back. more signs of a rebound in the housing market. core logic reporting u.s. home sales are up 6.3%. with fears of the fiscal cliff looms, are we out of the woods yet? are those worries prompting wealthy homeowners to sell ahead of possible tax changes? good to see everybody. robert, back in august you were the first to report the trend. now the race for homeowners to close before 2013 is heating up. just got a couple weeks left before the fiscal cliff. what's at stake here? >> for the wealthy homeowners and sellers, especially, it's a lot of money. if you have a $20 million or $had $30 million home, you're talking
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thousands in tax savings. the concern was this could add to inventory and possibly depress prices. you had wealthy people not just listing their homes in hopes of selling them this year but taking lower prices to avoid higher taxes. in fact, the housing market, especially at top, has been strong toward the ends of this year. i think some of those fears are now alleviated, especially with all the foreign money coming into places like miami and new york. i think if anything, this will add some welcome urgency to those wealthy sellers that don't need to sell, but they just need a little bit of a deadline. it's kind of lighting a fire under them to sell. i think it's been a positive for this market. >> dolly, what are you seeing out there? is the tax, you know, differential -- capital gains going from, what, 15% to who the heck knows what, 25 or 30%. is that motivating sellers right now? >> i have one deal after another. all of our christmas plans are off. my entire office is not taking a day off, period, from now until year end and haven't for weeks. ever since obama won the
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election, we are now in deal mode. i have to tell you, we're going to have a stellar year. it's going to be at a price. the price is going to be -- january is probably going to be much worse than predicted. february, march, et cetera. we're borrowing for the future, yet again. >> that's a really good point. is this just a short-term thing? next year in 2013, once we see cap gains taxes go much higher, which they probably will, do things slow down again? >> oh, yeah. i think it will slow down again. i think people will hunker down, particularly are the whole fiscal cliff story hanging. even if it goes over, which i predict it will -- >> so do i. >> diana, what are you seeing? >> in the high ends where dolly works, of course it's going to have a big effect. let's keep this in perspective when we look at the housing recovery. homes price ed over $1 million were just 1.7% of sales in october. this is a minuscule amount when
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you look at the overall housing market and the recovery. that's why we're not seeing prices come down. also, remember the high end was hit the hardest in the housing crash. if you bought your home, your multimillion dollar home five, four, even three years aerks your price has probably come down so much that you're not really looking at any capital gains when you finally do sell this home. >> that's a really good point. it is a small portion of the overall real estate market. >> without a question. >> what are you expecting in terms of pricing? when will we see prices start coming down? >> well, we may see it come down in pockets. for example, the upper east side, there's a lot of development going on. if we have all these conversions, new development, plus a few homeowners deciding, you know, i'm bailing, i could see that being a pocket where prices actually go down. up until now, new york has really been out of, you know, really okay. it's been perfect. people have not suffered in new york. >> and robert mentioned the foreign money. is that a big factor? >> huge factor.
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foreign money has been most of my business this year. amazing. >> robert, we saw it similar in 2010 when wealthy homeowners wanted to sell. they were afraid then congress was going to raise capital gains rates. you know, so, dolly is saying, yeah, we're seeing this rush of home activity now, but it slow down next year. is that what you're expecting? >> yeah, it's such a key point. we sort of see this movie before. in 2010, there was the expectation that capital gains would go up. at this time, places like the hamptons and new york, we saw a lot of inventory come on the market, prices come down, and in fact, inventory went up 5% to 10% in the hamptons. the next quarter, the first quarter the following year, we saw a dead market. nothing was happening. it took a couple quarters for things to rebound. of course, they did. dolly's absolutely right. today's sort of party will be the hangover in january and february. i think it's going to be a very quiet market. that's what we saw in 2010 when there wasn't even a tax increase, just the expectation that we would have one.
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>> diana, dolly is talking about pockets of price changes. what are you seeing in terms of home prices overall from the broader market you're looking at? >> well, from the broader market, we're seeing big price improvements. we get report after report this fall. they're not coming up quite as fast as they were over the summer, but we have definitely hit a bottom in home prices. especially when we look on the low end. when we talk about this housing recovery, we need to focus on the lower end, get them sold off. that's the key issue in this recovery. when you look at pockets like, you know, san francisco, manhattan, miami, the really high-end markets, those are again being fueled by a lot of all-cash foreign buyers. you're going to continue to see that money come in. if it does come down a bit because of the fiscal cliff, that's small pockets. overall, in general in the country, we are seeing a firm price recovery. >> but the big issue there is, if we eliminate the mortgage tax deduction for people under $1 million, we could really get
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hurt. >> that's a great point. this is why everything is tied to this fiscal cliff. >> exactly. >> you take out the mortgage deduction, and the traction we saw on the housing market reverses course. >> totally. i don't see how we can give $8,000 credits one year and the next year we take away the mortgage tax detux. a little consistency would be nice. >> are high-end home prices, do you think, are they ever going to go back to where we were when we saw them at the peak? >> for the highest end of the market, yes. i think they'll go even above the peak. >> why do you believe that? >> because people looking at real estate really as an asset again. i think a lot of money is out of the markets and back in real estate. when you're getting 20% on your money, it's going to be in the markets. when you're getting 1% on your money, it's not going to be in the markets. it's going to be somewhere else. >> on that point, we're already seeing above pre-crisis highs at central park west.
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miami, i was just down there mansion shopping with some russian millionaires recently. those houses, some of those multimillion dollar homes are above the pre-crisis highs. in many of these sort of pockets, we're already above those pre-crisis levels. i think we're just going to keep going higher. i'd love to be dolly. she's in a great spot in this market. >> you went mansion shopping, did you? >> we didn't buy anything. >> all right, everybody. thanks for your insights. we appreciate it. see you soon. we'll keep watching that housing market. will going over the fiscal cliff fuel even higher hospital bills, meanwhile? we're checking out health care next. we'll talk about the cliff's potential impact and obamacare and a host of ere issues as obamacare taxes take effect next month. also, you give us a minute and a half, our panel of experts will give you their strategies in tomorrow's market. stay with us. don't miss it. [ male announcer ] this is joe woods' first day of work.
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presbyterian hospital is with us. give me your concerns or feelings as we approach this fiscal cliff. do you think we'll get a deal done, or are you anticipating we go over the cliff? >> we're americans. we have to get a deal done. this is really important, and it's important for health care. at some point in time, we're going to have to come to grips with the fact there's got to be revenue. you have to have some rate increases, in my opinion. charitable deductions are a non-starter for us. that's a big issue. universities, hospitals, we depend on charity and charitable donations. >> let's stop right there because i want to take one part at a time. the charitable deductions, this is one of those deductions within the tax code that's being debated. that and as well the mortgage deduction. you think that if that incentive to give money away, that incentive to help hospitals, health care, you think people will give less? >> i know that.
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there's no question in my mind. >> why? >> because people do not want to feel that they're giving and then that deduction is limited. i've had discussions with many of our donors. i know that's true around the city and the country. >> what kind of hit will we see to the people who actually really need help, the charities? >> well, we need charitable donations. my hospital alone raises over $100 million a year in charitable donations. if that started to dry up, that would compound the problem. >> okay. continue about the challenges. let's talk medicare. >> medicare is on the table. we've put $ 155 billion worth of cuts in play for hospitals as part of the affordable care act. we recognize to cut a deal, medicare is probably on the table. but there are cuts that make sense and cuts that don't make sense. cutting graduate medical education, the training of our residents, makes no sense. we need more doctors in the future, why would you cut that payment? >> and already we're seeing fewer and fewer doctors, right? because they're not getting paid
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what they thought they would or what they were so many years ago. >> exactly. we've expanded medical student slots. we need to expand residency slots, not cut resident education. having said that, they have to look at cost of living increases in medicare. i do think we have to look at means testing in medicare. if the medicaid drug rebate was applied to medicare, that would net moneys. there are ways we can solve this. the republicans and the democrats both know that. they ought to come together and solve this issue. >> do you think we have the appropriate people looking at these things, who understand the implications? you're a doctor. you are in this knee deep, day in and day out. do you think that you've got that kind of expertise in washington actually zeroing in on the things that are very necessary and the things that actually are low hanging in terms of cutting? >> i think they know what they need to do. there has to be some give on the republican side on marginal rates, and there's got to be
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some give on the democratic side in terms of entitlement reform. i think if they can get to that give point, i think we'll have a deal. >> what are the implication of going over the cliff? i know you're optimistic. you say we're americans, we got to get a deal done, and we will at some point. but today, boehner's digging in. the president's digging in. we don't see them meeting. everybody's going into the white house, all these photo ops. yet, the one meeting we want to see, we haven't seen, the president and john boehner. >> cutting a deal. >> doesn't look like we're going to get one. what does that mean? >> 2% across the board cut in medicare goes into effect. dramatic cut in the nih budget. we're the leader in this country in biomedical research. it creating more uncertainty. we've planned for that in our budget, but we've got to move on. i think it would have a dramatic impact and a dramatic negative impact in terms of people's
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confidence in the government's ability to get something done. >> i'm glad you mentioned biomedicine. right now you have the russians and their project and the chinese and their project. everyone is trying to innovate. we could lose is in a nanosecond. >> exactly. the nih budget is a big deal. that's part of discretionary spending. keeping it flat has been a problem. the cuts in the sequester would be devastating. you're talking about a huge amount of underfunding of biomedical research in this country. genetic revolution, stem cells. that's got to be maintained. >> the reality of the situation, are you expecting job cuts as a result of this? in the hospital business, do you expect consolidation? you've got to operate your business regardless of what's going on, so how do you prepare? >> if we were to experience graduate medical education cuts, we would cut residency
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positions. that's really a problem. if we took draconian cuts, yes, we'd have to look at jobs. we're trying to save as many jobs as we possibly can. i think we can accommodate that. we can be part of the solution. we believe that we can help reduce cost of care in this country. it has to happen. >> in terms of, you know, your hospital being a beacon, your hospital sort of moving forward, what are you doing in terms of preserving some of this intelligence? and where is the talent coming from? would you say the students, are they american, international? do we have the right skill sets? >> american medical students are the finest in the world. we are still attracting the brightest young people to go into medicine, which is terrific. the people we train, we think are really trained to be expert in all fields, primary care, specialty care, et cetera. so we're very happy with what we do. we think that that's what a great academic standard like new
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york presbyterian or john hopkins should be doing for this country. >> we're talking a lot about the fiscal cliff, but you're also looking ahead to 2013 and 2014 when the obamacare, the health care legislation takes effect. the taxes take effect in january. it's really not implemented until 2014. how does that change your life? >> we've been preparing to take cost out for the better part of a year and a half. we're creating efficiencies of care. we're creating home care so that we can avoid people being admitted to the hospital. we want to be part of the solution to this problem. we can take cost out of the health care had system. let us do our job. >> steve, good to have you on the program. >> thanks, maria. appreciate it. >> always nice to see you. new york presbyterian ceo. will will move your money first thing tomorrow morning? we'll check it out for you. three of wall street's top experts weigh in. stay with us on "the closing bell." [ male announcer ] at scottrade, we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning,
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welcome back as the markets
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remain focused on the fiscal cliff what else should you be watching? 30 seconds on the clock for each of our next guests. joining me is chad. earnesto and jimmy lee from strategic wealth associates. chad, 30 seconds on the clock. what do you want to watch tomorrow? >> you have two things tomorrow. you have the ism service index. that is about 34 months of expansion as well as the adp report should be about 125 on that number as well as more important numbers, friday's number, the job's number and private payroll number could move the market. everyone is focused on the fiscal cliff. if you get a mini deal you should expect about a 3% to 5% pop in the market. >> we'll see about that. what are you watching? tell me how you prepare tomorrow. >> we have keys in our economic
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recovery and those are housing and jobs. we will have numbers that address those issues. it is very difficult over the next couple of weeks we are likely to have elevated volatility. longer term we are more optimistic and we still believe investors should be in stocks that have dividends. and low volatility we like these -- >> all right. jimmy, you're up. 30 seconds on the clock. give me things you want to watch tomorrow that will influence money. >> not just tomorrow but for the rest of the month i think the fiscal cliff can create a good buying opportunity for investors. last time the market reacted. i think investors need to be nimble and paying close attention to retail sales. as we are a consumer led economy
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and jobs are important. housing. home builder stocks have been way up. let's see what we have. >> we'll leave it there. we appreciate it and we will be watching all of those events tomorrow when the opening bell sounds after a 13 point selloff or decline my observation next on companies borrowing money to pay out special dividends. and don't miss the first interview with the ceo of pandora tomorrow on "squawk on the street". st started working, i put away money. i was 21, so i said, "hmm, i want to retire at 55." and before you know it, i'm 58 years old. time went by very fast. it goes by too, too fast. ♪ but i would do it again in a heartbeat. [ laughs ] ♪ ♪
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welcome back. finally tonight my observation on the consequences of bad fiscal policy. the latest evidence the incredible instances of companies borrowing money to give that money away. this is the kind of crazy behavior you getd when you have manipulation in the market. interest rates should be much higher than they are right now. however, they are artificially stuck at rock bottom levels. and there seems to be no end in sight for how long this will last so investors are hunting
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high and low for yield as we know that is why they are pay looking for dividend payers. why not get regular income from your investments as you search for some return in this low-rate environment. this is a deepening vicious cycle. the white house and congress have not given us a fiscal policy as the economy bumps along the bottom now for four years and counting. so the federal reserve saves the day. we finally get some fiscal policy by going over the fiscal cliff even if it is considered bad policy. for some taxes on divs we could see those taxes soar to 44%. companies wait to disperse this year. some companies are borrowing money just to pay out the dividend before the new year so
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they can get their investors to get the 15% dividend tax. is this the kind of corporate financial responsibility we want? borrowing money just to give it away? who wants a dividend that a company cannot afford or if it can afford it it chooses to borrow the tax. this is just an observation on how one bad policy can act as a domino effect. bad policy begets bad policy. it is another reason why america is pleading with washington to get a deal done on the fiscal cliff. stop taunting one another with plans that each side knows will not fly anyway and stop leaving american jobs hanging in the balance. before we go take a look at the day on wall street today. we have lights flashing around because it is the night that the new york stock exchange is celebrating the holiday. we have the tree outside and the tree lighting ceremony. the mt